Step #2 entails a little bit of math. Now that you’ve gathered and reviewed the information, it’s time to do something with it.

• Your budget will have 2 sections. One for income and one listing expenses (It’s generally easiest to work with monthly numbers). Make sure that all monthly expenses are included. Subtract the expenses from the income. Is the number negative or positive?

The objective is to have a positive number once expenses are subtracted from income – this means that your budget is balanced. If the number is negative you have 2 choices a) Increase income or b) Decrease expenses. A combination of increasing income and reducing expenses may be the answer.

Now you have a budget. The next post will cover Step # 3.